It’s important to build up good credit while you are still in college. Immediately after graduating, there will be things you need credit for. You will need to find an apartment or a home, you might want to buy a car, and you will definitely need to be able to carry a considerable amount of credit card debt since you won’t be able to afford anything since you will probably be unemployed. Building up your credit in college can be tough though. It is doubtful you will have much money to throw around, and you can’t risk getting any big non-student loans, because you probably won’t have time to generate the income in order to pay them off.
Opening a credit card while in college can be a good way to establish some credit early. You won’t have the credit record to open a real credit card with a high spending limit, but you should be able to qualify with one through your bank. There are also several credit card companies that offer cards specifically for college students. If you build up a credit card balance and pay it off regularly, you will establish a bit of credit and help your credit score. But it is also a risk. If you start using a credit card and end up going into debt, you could do huge damage to your future credit. So weigh your options for a college credit card, and avoid making these credit card mistakes that so many colleges students make.
Spending More Than You Have
Having a credit card offers you financial freedom that is likely unprecedented in your life. You can spend however much you want without worrying about how much is in your bank account, but you also can’t get carried away. If you spend outside of your limits, you will end up building up a balance that you can’t pay off monthly. Having a credit card that is carrying a balance does major damage to your credit score, and is counterproductive to the reason you got a credit card in the first place.
Opening Up Multiple Credit Cards
If you do fall into the trap of spending outside of your limits and end up carrying large amounts of debt on your credit card, the solution is not to open up a new card. It won’t help your credit score since your original card will still be in debt. And if you go into debt on your second card, you are really in trouble. Carrying around a small balance on several cards is equally damaging as carrying around a large balance on one card.
Not Using Your Card for Tuition
Whether you go to University of Colorado or Rutgers Online, you will be expected to make monthly tuition payments. No matter what is going on with the rest of your finances, you will have to make these payments. So this is a great opportunity for you to get a monthly balance on your card that you will be guaranteed to pay off.